Opinion: Here’s one Trump fan who might make you some money

David Smith pushes Trump line on Sinclair stations — and does other things that make sense

By

TimMullaney

Writer

Bloomberg News

Satellite dishes stand outside the headquarters building of Sinclair Broadcast Group Inc. in Hunt Valley, Md.

What is there about Donald Trump that makes otherwise sane people act so crazily? The list of examples isn’t short — the most recent is Anthony Scaramucci, the well-coiffed Wall Street salesman enlisted last week as White House communications director.

But the Trump devotee who might actually make you money is David Smith, executive chairman of Sinclair Broadcast Group
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.

To the left, Sinclair is next-to-evil-incarnate: It’s the 173-station TV company group making its newscasters run commentaries by former Trump aide Boris Epshteyn, a move the liberal online magazine Slate calls dispensing “cheerful propaganda on the local news for roughly 13½ minutes each day.”

One could point out that if Sinclair wants to prop up a president dogged by suspicions that he’s Russian strongman Vladimir Putin’s poodle, ubiquitous commentaries by an emigre named Boris might not be the ticket.

And yet: Sinclair shares have risen nearly 40-fold since 2009, when the financial crisis made car sales plummet and took the revenues of nearly all TV-station owners with them. Cars can account for 25% of ad revenues at companies like Sinclair. In even-numbered years, stations also rake in political-campaign bucks, about $200 million of Sinclair’s $2.7 billion in revenue last year (the company’s net profit was $245.3 million), taking money from both parties.

It’s Sinclair’s innovation, not its politics, that are making the money.

“I’m not sure the political context is material to the economic performance,” said Barry Lucas, who follows Sinclair for Gabelli & Co.

I’m an unlikely one to hail the business acumen of Smith, who took over the company from his dad, just like Trump.

I’ve only written about Sinclair twice I can remember, and not since late 1998. The first was pitching in on a 1996 Baltimore Sun piece about Smith getting busted in a company car with a woman charged with prostitution. The police report was entertaining, but not nearly as funny as the woman claiming, on a non-Sinclair Baltimore station, to be a family friend.

Then I had the slightly surreal experience of interviewing Barry Baker, then chief operating officer of Sinclair’s largest division. Baker had apparently decided to leave and unloaded on Smith, spending hours saying Baker did all the work while Smith tended to car dealerships he owned — and that Baker really, really admired Barry Diller. Who hired Baker when he left Sinclair, nanoseconds after the article appeared. Baker also discussed Smith’s arrest in cheerfully profane detail. Little wonder Lucas clearly remembered the piece 18 years later.

Both left me with a clear view of Sinclair: A boom-and-bust company delivering stock returns mostly when car sales were good, run by a guy I didn’t really know and didn’t exactly respect.

But Lucas says Smith has emerged as a leading innovator in the TV industry, letting shares zoom.

Smith and Perry Sook of rival Nexstar Media Group
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took some of the boom-and-bust out of the business by charging cable systems to carry their stations, Lucas said.

The law gave local broadcasters a choice between getting paid or being able to select the channel they would occupy on cable systems, and everybody else initially chose the branding advantage of being on “Channel 2,” or whatever they were on over-the-air broadcasts. Smith took the cash — Lucas estimates that adds $600 million to Sinclair’s yearly revenues.

Now Sinclair is poised to become America’s largest station group, with the pending acquisition of Tribune Media’s 40-plus stations, including New York and Chicago outlets.

“For all David’s flaws, he’s been among the most forward-thinking broadcasters,” Lucas said. “He saw the direction the business was going and has been a real proponent of technological change.”

All this makes Smith a much better business person than Trump, and makes you wonder why he’d see Trump as America’s savior. Or why he’d see Epshteyn, whose July 5 commentary backing Trump’s long-disproven claims of voter fraud has drawn 226 views on YouTube, as good for business. After all, comedian John Oliver’s HBO commentary ripping Epshteyn’s hiring has drawn 5.14 million.

Which brings us back to Scaramucci, who spent days after his appointment saying things like Trump “always gets what he wants,” (the first major bill Trump signs is likely to be a law limiting presidential power to lift sanctions on Russia). And he’s spouting administration prevarications about voter fraud, Russia’s election interference, and news leaks.

The point of Scaramucci is that a new wineskin doesn’t improve rancid wine. Lies remain lies when delivered in a more-expensive suit. The lesson of Smith broadcasting right-wing commentary is that Trump still has the lowest approval rating of any president six months in since polling began.

Scaramucci and Smith are smart enough to build large businesses, yet something about Trump makes them act like they don’t know better. The president is likelier to pull them down than they are to lift him up.

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